Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing of Proposed Rule Change Relating to Transfer of Positions Off the Floor, 69314-69316 [2011-28829]
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mstockstill on DSK4VPTVN1PROD with NOTICES
69314
Federal Register / Vol. 76, No. 216 / Tuesday, November 8, 2011 / Notices
Market-Makers than those originating
from other market participants
(including public customers) is
equitable and not unfairly
discriminatory because C2 MarketMakers take on certain obligations to the
Exchange (such as providing two-sided
markets) that other market participants
to not undertake. Offering a slightly
higher Maker rebate for orders
originating from public customers than
those originating from other market
participants (not including C2 MarketMakers) is equitable and not unfairly
discriminatory because the Exchange
believes this will attract public
customer order flow to the Exchange
and incentivize broker-dealers and firms
to execute public customer orders on
the Exchange. To the extent that this
purpose is achieved, all of the
Exchange’s market participants should
benefit from the improved market
liquidity and the greater number of
public customer orders with which to
trade. Further, the Exchange believes
that the proposed public customer
Maker rebate is not unfairly
discriminatory because the same rebate
would be assessed uniformly to all
public customers.
Offering a slightly lower Taker fee for
orders originating from public
customers than for orders originating
from other market participants is
equitable and not unfairly
discriminatory because the Exchange
believes this will attract public
customer order flow to the Exchange
and incentivize broker-dealers and firms
to execute public customer orders on
the Exchange. To the extent that this
purpose is achieved, all of the
Exchange’s market participants should
benefit from the improved market
liquidity and the greater number of
public customer orders with which to
trade. Further, the Exchange believes
that the proposed public customer Taker
fee is not unfairly discriminatory
because the same fee would be assessed
uniformly to all public customers. Also,
a number of other exchanges offer
different pricing for executions based on
the type of market participant from
which an order originates.7
The Exchange operates in a highly
competitive market in which
sophisticated and knowledgeable
market participants readily can, and do,
send order flow to competing exchanges
based on fee levels. The Exchange
believes that the fees it assesses must be
competitive with fees assessed on other
options exchanges. The Exchange
believes that this competitive
marketplace impacts the fees present on
the Exchange today and influences the
proposals set forth above.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
C2 does not believe that the proposed
rule change will impose any burden on
competition not necessary or
appropriate in furtherance of the
purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The proposed rule change is
designated by the Exchange as
establishing or changing a due, fee, or
other charge, thereby qualifying for
effectiveness on filing pursuant to
Section 19(b)(3)(A) of the Act 8 and
subparagraph (f)(2) of Rule 19b–4 9
thereunder. At any time within 60 days
of the filing of the proposed rule change,
the Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–C2–2011–032 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–C2–2011–032. This file
number should be included on the
subject line if email is used.
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Jkt 226001
[FR Doc. 2011–28830 Filed 11–7–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–65666; File No. SR–Phlx–
2011–118]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing of Proposed Rule Change
Relating to Transfer of Positions Off
the Floor
November 2, 2011.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1, and Rule 19b–4 2 thereunder,
notice is hereby given that on October
20, 2011, NASDAQ OMX PHLX LLC
(‘‘Phlx’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I, II,
and III, below, which Items have been
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
U.S.C. 78s(b)(3)(A).
9 17 CFR 240.19b–4(f)(2).
Note 3.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Kevin M. O’Neill,
Deputy Secretary.
10 17
8 15
7 See
To help the Commission process and
review your comments more efficiently,
please use only one method. The
Commission will post all comments on
the Commission’s Internet Web site
(https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room on official business
days between the hours of 10 a.m. and
3 p.m. Copies of such filing also will be
available for inspection and copying at
the principal offices of the Exchange.
All comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File
Number SR–C2–2011–032, and should
be submitted on or before November 29,
2011.
PO 00000
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Federal Register / Vol. 76, No. 216 / Tuesday, November 8, 2011 / Notices
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange, pursuant to Section
19(b)(1) of the Act 3 and Rule 19b–4
thereunder,4 proposes a new Exchange
Rule 1058 entitled ‘‘Transfer of
Positions’’ to provide a process by
which members and member
organizations may transfer option
positions in limited circumstances.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://www.nasdaqtrader.com/
micro.aspx?id=PHLXRulefilings, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
mstockstill on DSK4VPTVN1PROD with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of the proposed rule
change is to provide members and
member organizations a mechanism in
which to transfer option positions in
certain specified circumstances. The
Exchange is proposing to amend its
Rules to adopt a new Exchange Rule
1058, entitled ‘‘Transfer of Positions.’’ 5
The purpose of this Rule is to address
narrowly-defined transfers of option
positions between accounts,
individuals, or entities and codify a
current policy at the Exchange for off
the floor transfers.
Currently, Exchange Rules do not
specifically address transfers of option
positions between accounts, individuals
3 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
5 Exchange Rule 1058 is currently reserved. The
Exchange proposes to delete the word ‘‘Reserved’’
and insert this new Rule in its place.
4 17
VerDate Mar<15>2010
16:29 Nov 07, 2011
Jkt 226001
or entities. The Exchange, however, has
made exceptions to allow off the floor
transfers in situations similar to those
permitted on other exchanges. The
proposed rule would formalize the
Exchange’s policies with respect to off
the floor transfers of options positions
in certain limited circumstances.
Specifically, the Exchange would
permit off the floor transfers of options
listed on the books of member or
member organization only if such
transfer involves one or more of the
following events: (i) The dissolution of
a joint account in which the remaining
member or member organization
assumes the positions of the joint
account; (ii) the dissolution of a
corporation or partnership in which a
former nominee of that corporation or
partnership assumes the positions; (iii)
positions transferred as part of a
member or member organization’s
capital contribution to a new joint
account, partnership, or corporation;
(iv) the donation of positions to a notfor-profit corporation; (v) the transfer of
positions to a minor under the Uniform
Gifts to Minors Act; (vi) a merger or
acquisition resulting in a continuity of
ownership or management; or (vii)
consolidation of accounts within a
member or member organization. The
members and member organizations
would be required to provide the
Exchange with prior written notice of
the transfer, specifically the positions to
be transferred and the reason for the
transfer.
The proposed Exchange Rule 1058
provides that members and member
organizations must transfer positions
pursuant to this Rule at the same prices
that appear on the books of the
transferring member or member
organization,6 and the transfer must
indicate the date when the original trade
was made. In the course of transferring
positions, no position shall net itself
against another position.7 Each member
or member organization that is a party
to a transfer of positions would be
required to make and retain records
which include: (i) The nature of the
transaction; (ii) the name of the counter6 The same cost basis would apply to the
positions once they have been transferred.
7 Long positions and short positions will not be
permitted to ‘‘net’’ against each other. For example,
if a member desired to transfer 100 long calls into
another account that contained 100 short calls of
the same options series along with other positions,
and the transfer met one of the above permitted
exceptions, that transfer of the offsetting options
series could not occur pursuant to this Rule because
those positions would net against each other
resulting in a closing of the position. The member
would be required to trade out of that position as
per the Exchange’s Rules, either on the floor or
electronically.
PO 00000
Frm 00078
Fmt 4703
Sfmt 4703
69315
party; and (iii) any other information
required by the Exchange.8
The Exchange believes that permitting
off the floor transfers in very limited
circumstances such as where there is no
change is beneficial ownership, to
contribute to a non-profit corporation, to
transfer to a minor or a transfer by
operation of law is reasonable to allow
a member or member organization to
accomplish certain goals efficiently. The
Exchange is seeking to memorialize its
current policy regarding off the floor
transfers in order to allow its members
to transfer positions in the same manner
as on other exchanges.9
The above-referenced exceptions
would allow the Exchange to permit
transfers in situations involving
dissolutions of entities or accounts, for
purposes of donations, mergers or by
operation of law. For example, a
member that is undergoing a structural
change and a one-time movement of
positions may require a transfer of
positions or a member is leaving a firm
that will no longer be in business may
require a transfer of positions to another
firm. Also, a member may require a
transfer of positions to make a capital
contribution. The above-referenced
circumstances are situations where the
transferor continues to maintain some
ownership interest or manage the
positions transferred.
To date, the Exchange has permitted
such off-the floor transfers in limited
circumstances and this Rule seeks to
codify the specific circumstances where
off the floor transfers of positions would
be permitted.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 10 in general, and furthers the
objectives of Section 6(b)(5) of the Act 11
in particular, in that it is designed to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and, in general to protect
investors and the public interest, by
providing an accommodation for
members and member organizations
who desire to transfer options positions.
The Exchange believes that establishing
a new Rule which provides clear
8 Records should be maintained in accordance
with the member or member organization’s books
and records policy and in conformity with Rules
17a–3 and 17a–4 of the Act.
9 The Chicago Board Options Exchange,
Incorporated (‘‘CBOE’’) and NYSE Arca, Inc.
(‘‘NYSE Arca’’) permit members to effect off-floor
transfers in certain circumstances. See CBOE Rule
6.49A. See also NYSE ARCA Rule 6.78.
10 15 U.S.C. 78f(b).
11 15 U.S.C. 78f(b)(5).
E:\FR\FM\08NON1.SGM
08NON1
69316
Federal Register / Vol. 76, No. 216 / Tuesday, November 8, 2011 / Notices
guidelines on when such off the floor
transfers would be permissible would
assist members and member
organizations seeking to transfer
positions and provide notification to the
Exchange.
The primary reason that members
prefer to transfer positions as opposed
to trading out of them is that
transferring positions affords a
reduction in administrative overhead
and cost. In the typical situation, a
member is undergoing a structural
change and a one-time movement of
positions offers efficiency in that
process. The Exchange believes that this
new Exchange Rule 1058 would allow
members and member organizations the
opportunity to efficiently and effectively
transfer their option positions in limited
situations off the floor.
The Exchange believes that the
proposed rule creates an orderly process
for allowing such transfers. The Rule
serves to protect investors and the
public interest because the proposed
Rule permits transfers off-floor only in
limited instances.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
mstockstill on DSK4VPTVN1PROD with NOTICES
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
As the Commission may designate up to
90 days of such date if it finds such
longer period to be appropriate and
publishes its reasons for so finding or
(ii) as to which the Exchange consents,
the Commission shall: (a) By order
approve or disapprove such proposed
rule change, or (b) institute proceedings
to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
VerDate Mar<15>2010
16:29 Nov 07, 2011
Jkt 226001
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–Phlx–2011–118 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–Phlx–2011–118. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official
business days between the hours of 10
a.m. and 3 p.m. Copies of such filing
also will be available for inspection and
copying at the principal office of the
Exchange. All comments received will
be posted without change; the
Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–Phlx–
2011–118 and should be submitted on
or before November 29, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Kevin M. O’Neill,
Deputy Secretary.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–65667; File No. SR–Phlx–
2011–136]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing of Proposed Rule Change
Relating to Transfer of Exchange
House Accounts
November 2, 2011.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 2 thereunder,
notice is hereby given that on October
19, 2011, NASDAQ OMX PHLX LLC
(‘‘Phlx’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I, II,
and III, below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange, pursuant to Section
19(b)(1) of the Act 3 and Rule 19b–4
thereunder,4 proposes a new Exchange
Rule 912 entitled ‘‘Transfer of
Accounts’’ to codify a current Exchange
policy with respect to the transfer of
accounts.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://www.nasdaqtrader.com/
micro.aspx?id=PHLXRulefilings, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
[FR Doc. 2011–28829 Filed 11–7–11; 8:45 am]
1 15
BILLING CODE 8011–01–P
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(1).
4 17 CFR 240.19b–4.
2 17
12 17
PO 00000
CFR 200.30–3(a)(12).
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Agencies
[Federal Register Volume 76, Number 216 (Tuesday, November 8, 2011)]
[Notices]
[Pages 69314-69316]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-28829]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65666; File No. SR-Phlx-2011-118]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing of Proposed Rule Change Relating to Transfer of Positions Off
the Floor
November 2, 2011.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\, and Rule 19b-4 \2\ thereunder, notice is hereby given
that on October 20, 2011, NASDAQ OMX PHLX LLC (``Phlx'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II, and III, below, which Items have been
[[Page 69315]]
prepared by the Exchange. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange, pursuant to Section 19(b)(1) of the Act \3\ and Rule
19b-4 thereunder,\4\ proposes a new Exchange Rule 1058 entitled
``Transfer of Positions'' to provide a process by which members and
member organizations may transfer option positions in limited
circumstances.
---------------------------------------------------------------------------
\3\ 15 U.S.C. 78s(b)(1).
\4\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
The text of the proposed rule change is available on the Exchange's
Web site at https://www.nasdaqtrader.com/micro.aspx?id=PHLXRulefilings,
at the principal office of the Exchange, and at the Commission's Public
Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is to provide members and
member organizations a mechanism in which to transfer option positions
in certain specified circumstances. The Exchange is proposing to amend
its Rules to adopt a new Exchange Rule 1058, entitled ``Transfer of
Positions.'' \5\ The purpose of this Rule is to address narrowly-
defined transfers of option positions between accounts, individuals, or
entities and codify a current policy at the Exchange for off the floor
transfers.
---------------------------------------------------------------------------
\5\ Exchange Rule 1058 is currently reserved. The Exchange
proposes to delete the word ``Reserved'' and insert this new Rule in
its place.
---------------------------------------------------------------------------
Currently, Exchange Rules do not specifically address transfers of
option positions between accounts, individuals or entities. The
Exchange, however, has made exceptions to allow off the floor transfers
in situations similar to those permitted on other exchanges. The
proposed rule would formalize the Exchange's policies with respect to
off the floor transfers of options positions in certain limited
circumstances.
Specifically, the Exchange would permit off the floor transfers of
options listed on the books of member or member organization only if
such transfer involves one or more of the following events: (i) The
dissolution of a joint account in which the remaining member or member
organization assumes the positions of the joint account; (ii) the
dissolution of a corporation or partnership in which a former nominee
of that corporation or partnership assumes the positions; (iii)
positions transferred as part of a member or member organization's
capital contribution to a new joint account, partnership, or
corporation; (iv) the donation of positions to a not-for-profit
corporation; (v) the transfer of positions to a minor under the Uniform
Gifts to Minors Act; (vi) a merger or acquisition resulting in a
continuity of ownership or management; or (vii) consolidation of
accounts within a member or member organization. The members and member
organizations would be required to provide the Exchange with prior
written notice of the transfer, specifically the positions to be
transferred and the reason for the transfer.
The proposed Exchange Rule 1058 provides that members and member
organizations must transfer positions pursuant to this Rule at the same
prices that appear on the books of the transferring member or member
organization,\6\ and the transfer must indicate the date when the
original trade was made. In the course of transferring positions, no
position shall net itself against another position.\7\ Each member or
member organization that is a party to a transfer of positions would be
required to make and retain records which include: (i) The nature of
the transaction; (ii) the name of the counter-party; and (iii) any
other information required by the Exchange.\8\
---------------------------------------------------------------------------
\6\ The same cost basis would apply to the positions once they
have been transferred.
\7\ Long positions and short positions will not be permitted to
``net'' against each other. For example, if a member desired to
transfer 100 long calls into another account that contained 100
short calls of the same options series along with other positions,
and the transfer met one of the above permitted exceptions, that
transfer of the offsetting options series could not occur pursuant
to this Rule because those positions would net against each other
resulting in a closing of the position. The member would be required
to trade out of that position as per the Exchange's Rules, either on
the floor or electronically.
\8\ Records should be maintained in accordance with the member
or member organization's books and records policy and in conformity
with Rules 17a-3 and 17a-4 of the Act.
---------------------------------------------------------------------------
The Exchange believes that permitting off the floor transfers in
very limited circumstances such as where there is no change is
beneficial ownership, to contribute to a non-profit corporation, to
transfer to a minor or a transfer by operation of law is reasonable to
allow a member or member organization to accomplish certain goals
efficiently. The Exchange is seeking to memorialize its current policy
regarding off the floor transfers in order to allow its members to
transfer positions in the same manner as on other exchanges.\9\
---------------------------------------------------------------------------
\9\ The Chicago Board Options Exchange, Incorporated (``CBOE'')
and NYSE Arca, Inc. (``NYSE Arca'') permit members to effect off-
floor transfers in certain circumstances. See CBOE Rule 6.49A. See
also NYSE ARCA Rule 6.78.
---------------------------------------------------------------------------
The above-referenced exceptions would allow the Exchange to permit
transfers in situations involving dissolutions of entities or accounts,
for purposes of donations, mergers or by operation of law. For example,
a member that is undergoing a structural change and a one-time movement
of positions may require a transfer of positions or a member is leaving
a firm that will no longer be in business may require a transfer of
positions to another firm. Also, a member may require a transfer of
positions to make a capital contribution. The above-referenced
circumstances are situations where the transferor continues to maintain
some ownership interest or manage the positions transferred.
To date, the Exchange has permitted such off-the floor transfers in
limited circumstances and this Rule seeks to codify the specific
circumstances where off the floor transfers of positions would be
permitted.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \10\ in general, and furthers the objectives of Section
6(b)(5) of the Act \11\ in particular, in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest, by providing an accommodation for members and member
organizations who desire to transfer options positions. The Exchange
believes that establishing a new Rule which provides clear
[[Page 69316]]
guidelines on when such off the floor transfers would be permissible
would assist members and member organizations seeking to transfer
positions and provide notification to the Exchange.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The primary reason that members prefer to transfer positions as
opposed to trading out of them is that transferring positions affords a
reduction in administrative overhead and cost. In the typical
situation, a member is undergoing a structural change and a one-time
movement of positions offers efficiency in that process. The Exchange
believes that this new Exchange Rule 1058 would allow members and
member organizations the opportunity to efficiently and effectively
transfer their option positions in limited situations off the floor.
The Exchange believes that the proposed rule creates an orderly
process for allowing such transfers. The Rule serves to protect
investors and the public interest because the proposed Rule permits
transfers off-floor only in limited instances.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) As the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission shall: (a) By order approve
or disapprove such proposed rule change, or (b) institute proceedings
to determine whether the proposed rule change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-Phlx-2011-118 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2011-118. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-Phlx-2011-118 and should be
submitted on or before November 29, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-28829 Filed 11-7-11; 8:45 am]
BILLING CODE 8011-01-P